Insignia Financial Group

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Insignia Financial Group
IndustryReal estate
FateAcquired by Aimco & CBRE Group
Founded1990; 29 years ago (1990)
Defunct2003; 16 years ago (2003)
HeadquartersGreenville, South Carolina

Insignia Financial Group was a company that invested in apartments that were financially distressed, with the goal of increasing value via recapitalization.[1] It was founded and controlled by billionaire Andrew L. Farkas and was headquartered in Greenville, South Carolina. It was the largest manager of apartments, controlling 300,000 apartment units at its peak.[2] The company was sold in two tranches in 1999 and 2003.

History[edit]

Insignia was launched in 1990 by Andrew L. Farkas with about $5 million in family money.[1] Farkas is the grandson of George Farkas, the founder of Alexander's,[1] the nephew of Alexander S. Farkas, its former chief executive officer, and the son of Robin Farkas, its former chairman.[3]

The company received financing from Lehman Brothers.[4]

In 1990, the company acquired the assets of U.S. Shelter Corp, which managed 55,000 apartments. After the acquisition, Insignia owned or operated about $1.5 billion in real estate assets in 32 states.[5]

In October 1993, the company became a public company via an initial public offering led by Lehman Brothers.[6]

In 1996, the company acquired the Edward S. Gordon Company for $74 million.[2][7] Gordon then worked for Insignia until his death in 2000 from colon cancer, at which time Insignia received $19.1 million from a key person insurance policy taken on his life.[8]

In 1997, the company was accused by the U.S. Department of Housing and Urban Development of giving $7.6 million in kickbacks to owners of subsidized housing.[4] The company paid to settle the case without admitting any wrongdoing.[4]

In 1997, the company acquired Cleveland, Ohio-based Realty One for $39 million.[9][3]

In 1998, the company sold its apartment investment division to Aimco for $910 million in cash and stock.[10]

In 1999, the company acquired Douglas Elliman from the family of Seymour Milstein for $65 million in cash.[11]

In March 2003, the company sold Douglas Elliman to an affiliate of New Valley LLC for $73.5 million.[12][13][14]

In 2003, the remainder of Insignia was sold to CBRE Group for $415 million in cash.[15][16]

References[edit]

  1. ^ a b c Jones, David (November 1, 2011). "Andrew Farkas: The sequel". The Real Deal.
  2. ^ a b DEUTSCH, CLAUDIA H. (June 18, 1996). "Insignia Financial to Acquire Edward S. Gordon Company". The New York Times.
  3. ^ a b HOLUSHA, JOHN (July 11, 1999). "Insignia Group's Expanding Universe". The New York Times.
  4. ^ a b c Agovino, Theresa (October 23, 2011). "Property mogul Andrew Farkas aims for coup No. 2". Crain Communications.
  5. ^ "RECAPITALIZING U.S. Shelter sells assets to Insignia Financial Group". GoUpstate.com. January 3, 1991.
  6. ^ "Equity Issues This Week". The New York Times. October 11, 1993.
  7. ^ Grant, Peter (June 18, 1996). "EDWARD S. GORDON SOLD FOR 74M". New York Daily News.
  8. ^ Weiss, Lois (November 3, 2000). "ED GORDON'S LIFE INSURANCE POLICY PAID FIRM $19M". New York Post.
  9. ^ "Insignia buys Realty One". United Press International. September 30, 1997.
  10. ^ HOLUSHA, JOHN (March 18, 1998). "Residential Real Estate; Insignia Financial Announces Plans for a Corporate Restructuring". The New York Times.
  11. ^ HOLUSHA, JOHN (May 29, 1999). "Douglas Elliman Real Estate Brokerage to Be Sold". The New York Times.
  12. ^ Keil, Braden (March 17, 2003). "PRUDENTIAL PAYS $73.5M FOR INSIGNIA DOUGLAS ELLIMAN". New York Post.
  13. ^ "Insignia sells Douglas Elliman". Crain Communications. March 17, 2003.
  14. ^ "New Valley's 50%-Owned Real Estate Entity Acquires Insignia Douglas Elliman; Forms Prudential Douglas Elliman, The Largest Residential Brokerage in New York Metropolitan Area". Business Wire (Press release). March 17, 2003.
  15. ^ Vincent, Roger (February 19, 2003). "CB Richard Ellis to Buy Insignia". Los Angeles Times.
  16. ^ Corfman, Thomas A. (February 19, 2003). "CB Richard Ellis acquires Insignia". Chicago Tribune.